S. Korea orders Lehman Brothers to halt operations

(ATTN: UPDATES with stock market reactions, details) SEOUL, Sept. 16 (Yonhap) -- The South Korean operations of Lehman Brothers Holdings Inc. were halted by the nation's financial regulator on Tuesday, a day
after America's No. 4 investment bank filed for bankruptcy.

In a statement, the Financial Services Commission said it banned the two Lehman
units in Seoul from selling its assets and repaying debts until Dec. 15.

The measure was aimed at "protecting investors at home and preventing
potential chaos in local financial markets," the commission said in the
statement.

In Seoul, the nation's benchmark stock index plunged 6.54 percent at opening on
news of Lehman's demise and U.S. insurance giant American International Group
Inc.'s struggle for survival after being battered by mortgage losses.

Lehman's Seoul units will also be prohibited from receiving deposits, trading
stocks and transferring money overseas, the commission said.

Earlier in the day, Vice Finance Minister Kim Dong-soo said his government will
provide liquidity to stabilize the nation's financial markets in the wake of
Lehman's collapse.

"The government and the Bank of Korea will take steps against excessive
fluctuations in foreign exchange markets," Kim said in a breakfast meeting
with officials from the financial regulator and the central bank.

As of the end of July, the Lehman units in Seoul had a total of 1.6 trillion won
(US$1.44 billion) in assets from investors, it said.

The 158-year-old investment bank collapsed over the weekend under its heavy
exposure to mortgage losses in the U.S.

South Korean financial companies held about $720 million in securities linked to
Lehman, the commission said on Monday.